US' much ado about nothing
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The US also has to understand that China is no longer the country it was in the 1930s when the Silver Purchase Act wreaked havoc on its economy. Instead, it has developed strong economic ties with the US, which Lawrence Summers, director of the US National Economic Council, once described as a "balance of financial terror", indicating that neither side could afford to jeopardize bilateral relations.
The US, to be honest, is seeking opportunities to cooperate with China in several fields. Just after the House of Representatives passed the bill, US Treasury Secretary Timothy Geithner expressed confidence in Sino-US ties, highlighting Sino-US cooperation in global events such as IMF and G20 meetings. Viewed in this light, the bill is not likely to get the nod of either the US Senate or president.
So, why was the bill moved?
It has a lot to do with US politicians' self-interests. US politicians were just trying to use the bill to show US citizens that they had the courage to confront China on the yuan to protect jobs at home. If the Senate passes the bill, the US politicians have to bear the responsibility of letting loose "financial terror" and harming Sino-US ties. But they know they can always blame the Senate for that.
What if it is passed and signed by US President Barack Obama? Then the US politicians can start all over again and blame China for the China-US trade imbalance. Apart from what Geithner said after the US House of Representatives passed the bill, he also said recently that China was to blame for the currency disputes among the emerging economies. That was obviously meant to sow the seeds of global resentment against China.
But such a statement exposes the US' self interests, too. The US' top financial officials need to shift their people's attention from the country's struggling economy to cover up their incompetence and blame China for everything that is going wrong in their country.
US investors, especially speculators, would love to get such an opportunity, for they could use it to make more profit. After all, they hate peaceful situations, economic as well as political.
Plus, the "official-businessman rotation" is a common phenomenon in the US. So, top finance officials will find it easier to secure a prestigious position on Wall Street after their terms in the US administration are over as long as they influence the market to their advantage while in office. That's why they have been creating much ado about nothing over the yuan every now and then.
The author is a research scholar with the Chinese Academy of International Trade and Economic Cooperation, affiliated to the Ministry of Commerce.
